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Business-Related Case Studies

Submitted by on March 9, 2010 – 8:59 amNo Comment

There are now many successful examples of mutual credit systems, or business-to-business currencies, such as the Wir and the Wat described below.  They demonstrate the very beneficial effects of complementary currencies for businesses.   Such currencies can be created at local, regional or national scales.   Adopting such a currency on a supra-national scale would also have tremendous benefits for the global economy, as argued in the White Paper proposal for the Terra.

The Wir

The WIR is a business to business (B2B) mutual credit system, managed by a cooperative dual currency WIR-bank (  It is viewed as the most mature complementary currency system in the world, counting 75,000 Swiss businesses as members, a quarter of all businesses in the country.

One WIR is equal in value to one Swiss Franc. It can be generated directly among businesses: the business selling a good or service gets a WIR credit, and the buyer the corresponding debit. The WIR-bank, a cooperative owned by the businesses using it, also provides loans and payment services in both the national currency and the WIR (see

The most interesting characteristic of the WIR system for today’s situation is that it has proven to be a spontaneous counter-cyclical shock-absorber for the Swiss economy. Indeed, a detailed macro-economic study has proven that this complementary currency has been the secret of Switzerland’s proverbial economic stability.   During every recession, when regular banks reduce lending, the volume of WIR participants and currency expands to meet the financing needs of businesses, and facilitate exchanges among them.  When the economy heats up again, the volume of WIR currency in circulation spontaneously tends to decrease.  Therefore, this complementary currency contributes to the Swiss central bank’s  efforts  to smooth both the boom and bust peaks in the Swiss economy.

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The WAT System

The WAT system (described by Izumi, in a 2001 paper) is a peer-to-peer complementary currency system initially designed by Eiichi Moreno. It is used in Japan typically to allow for small businesses to issue IOUs (called WAT-ticket) to their suppliers. These suppliers in turn circulate them within an undefined community, until they are eventually redeemed with the issuing business.   It was described in detail in an article published in the International Journal of Complementary Currency Research.

The Terra

This leads us to ask what the benefits for the global economy would be if such a complementary currency became available on a supra-national scale.  The “Terra” is specifically intended for such a role.

The Terra is a complementary currency designed to provide an inflation-resistant international standard of value; to stabilize the business cycle on a global level; and to realign stockholder’s interests with long-term sustainability.

From a legal viewpoint, the Terra is standardized “countertrade” (international barter), which is routinely used for over one trillion dollars worth of transactions per year. Legislation on countertrade exists in about two hundred countries, including all the major trading nations.  Introducing the Terra would therefore not require new international governmental agreements.

Terras would be issued by the Terra Alliance (a cooperative of its corporate users), as electronic inventory receipts for commodities sold to it by producers. It would therefore be fully backed by a standard basket of the most important commodities and services traded in the global market (e.g. oil, wheat, copper, and some standardizable services like international freight or carbon emission rights).  The cost of storage of the physical commodities (estimated at 3.5-4% per annum) would be paid by the bearer of the Terra. This makes the Terra a ‘demurrage’ currency, i.e. with a negative interest rate. This encourages its use only as a contractual, planning and trading device, and not as a store of value.

The Terra would address the two issues identified at the beginning of this article.  It would, like the WIR, be spontaneously counter-cyclical to the conventional money creation process, thereby stimulating the world economy in downturns and cooling it off in boom periods. Furthermore, the demurrage feature of the Terra would realign financial interest with long-term thinking, thereby resolving the conflict between shareholders’ optimization and long-term sustainability. Finally, it would be an inflation-resistant currency, ideal to track results over long time periods or across countries.

For more details about the nature and benefits of the Terra and the practical steps needed for its implementation, read the Terra White Paper.